Accounting | yes | Montgomery College

Quiz

Question 1 (4 points)

Saved

Which of the following is not a purpose of government financial reporting:

Question 1 options:

a) 

Evaluate efficiency and effectiveness

b) 

Compare actual results with the budget

c) 

Determine compliance with laws and regulations

d) 

Determine the overall profitability of the government entity

Question 2 (4 points)

Saved

A current rate of exchange between two currencies is known as the:

Question 2 options:

a) 

Forward Rate

b) 

Floating Rate

c) 

Average Rate

d) 

Spot Rate

Question 3 (4 points)

Saved

Accounting standards relevant to private not-for-profit entities include all of the following except:

Question 3 options:

a) 

FASB 101

b) 

FASB 116

c) 

FASB 93

d) 

FASB 117

Question 4 (4 points)

Saved

A(n) _____ to either ____ or _____ some quantity of a particular foreign currency represents a foreign currency option.

Question 4 options:

a) 

Right, sell, buy

b) 

Right, hold, retain

c) 

Obligation, buy, sell

d) 

Obligation, hold, retain

Question 5 (4 points)

Saved

A ____________ is a type of governmental fund that accounts for resources for which the governmental units acts of trustee or agent.

Question 5 options:

a) 

Permanent fund

b) 

Special revenue fund

c) 

Proprietary fund

d) 

Fiduciary fund

Question 6 (4 points)

Saved

___________ are the standards issued by the International Accounting Standards Board.

Question 6 options:

a) 

International Financial Reporting Standards

b) 

Global Accounting Standards

c) 

General Accepted Accounting Principles

d) 

IASBs

Question 7 (4 points)

Saved

Agency funds are used for all of the following except:

Question 7 options:

a) 

Pass-through grants

b) 

Grants, entitlements, shared revenue

c) 

Tax collections for itself

d) 

Payroll deductions

Question 8 (4 points)

Saved

Convergence initiatives of the FASB include all of the following except:

Question 8 options:

a) 

Joint projects with the IASB

b) 

IASB member in residence at the FASB

c) 

Rewriting all of GAAP to align with IFRS

d) 

FASB monitoring IASB projects

Question 9 (4 points)

Chapter ____ is the solution available through the bankruptcy code when a troubled corporation is liquidated.

Question 9 options:

a) 

13

b) 

11

c) 

7

d) 

22

Question 10 (4 points)

Saved

All of the following are traits of disclosed information about a segment with the exception of:

Question 10 options:

a) 

Disclosure of the segment assets

b) 

The measure of profit or loss follows a management approach focusing on internal decision making rather than any strict definition of profit used by the enterprise

c) 

Information presented for reportable segments must be reconciled to the respective consolidated amounts for the enterprise as a whole

d) 

Information must be presented in the dominant foreign currency if the majority of the segment’s assets are located outside the U.S.

Question 11 (4 points)

All of the following are types of journal entries encountered in government accounting with the exception of:

Question 11 options:

a) 

Budgetary entries

b) 

Accrual entries

c) 

Closing entries

d) 

Operating entries

Question 12 (4 points)

Saved

A future rate of exchange between two currencies is known as the:

Question 12 options:

a) 

Spot Rate

b) 

Forward Rate

c) 

Average Rate

d) 

Floating Rate

Question 13 (4 points)

A governmental fund balance that represents potential uses of resources planned for a future period is referred to as:

Question 13 options:

a) 

Unreserved Designated

b) 

Encumbered

c) 

Reserved

d) 

Unreserved Undesignated

Question 14 (4 points)

This is the applicable reorganization solution available through the bankruptcy code when a corporation remains in business through a restructuring of its debt and/or equity.

Question 14 options:

a) 

Chapter 11

b) 

Chapter 13

c) 

Chapter 22

d) 

Chapter 7

Question 15 (4 points)

Saved

Which of the following is not a factor influencing the development of accounting.

Question 15 options:

a) 

Geographic location

b) 

Standard Setting Process

c) 

Social and cultural values

d) 

Political and legal systems

Question 16 (4 points)

Orange Co., a domestic entity, sold goods to a British company on 5/10 with the transaction denominated in Pounds. The sales price of the goods was £200,000, and the cost of the goods was $100,000. The receivable is payable in full on 6/10, and Orange Co. prepares their financials monthly. Relevant exchanges rates are 5/10 £1 = $1.25, 5/31 £1 = $1.30, and 6/10 £1 = $1.35. Based on this information, what was the amount booked to cost of goods sold by Company D on 5/10?

Question 16 options:

a) 

$100,000

b) 

£ 100,000

c) 

$80,000

d) 

$125,000

Question 17 (4 points)

Company D, a domestic entity, sold goods to a British company on 5/10 with the transaction denominated in Pounds. The sales price of the goods was £300,000, and the cost of the goods was $100,000. The receivable is payable in full on 6/10, and Company D prepares their financials monthly. Relevant exchanges rates are 5/10 £1 = $1.10, 5/31 £1 = $1.15, and 6/10 £1 = $1.20. Based on this information, how much would accounts receivable need to be revalued by on 5/31?

Question 17 options:

a) 

$10,000 decrease

b) 

$15,000 decrease

c) 

$15,000 increase

d) 

$0

Question 18 (4 points)

Company F is a foreign subsidiary of a domestic company and Company F’s functional currency is the Euro. On Company F’s financials at the end of the year 2018, they reported €50,000 in inventory. If the spot rate on 1/1/18 was €1 = $1.06, the spot rate on 12/31/18 was €1 $1.15, and the weighted average rate for the full year 2018 was €1 = $1.10, how much is the translated balance of inventory in U.S. $ at year-end?

Question 18 options:

a) 

$53,000

b) 

$50,000

c) 

$55,000

d) 

$57,500

Question 19 (4 points)

Company F is a foreign subsidiary of a domestic company and Company F’s functional currency is the Euro. On Company F’s financials at the end of the year 2018, they reported €200,000 in cost of goods sold. If the spot rate on 1/1/18 was €1 = $1.12, the spot rate on 12/31/18 was €1 $1.02, and the weighted average rate for the full year 2018 was €1 = $1.18, how much is the translated balance of cost of goods sold in U.S. $ at year-end?

Question 19 options:

a) 

$236,000

b) 

$224,000

c) 

$204,000

d) 

$200,000

Question 20 (4 points)

Company F is a foreign subsidiary of a domestic company and Company F’s functional currency is the Euro. The total U.S. $ Translated balances of total assets per the trial balance at year-end but prior to closing entries is $850,000, liabilities is $200,000, equity is $450,000, and net income adds up to $150,000. The amount to be entered into Accumulated Translation Adjustment will be:

Question 20 options:

a) 

$100,000 debit

b) 

$50,000 credit

c) 

$50,000 debit

d) 

$100,000 credit

Question 21 (4 points)

Lydia, James, and Lola form a partnership where each partner will have an equal share to start. Lydia contributes $60,000 in cash, James contributes $60,000 in equipment, and Lola contributes $20,000 in cash and bring to the table expertise that the partners agree is worth $40,000, and choose to account for the value of this expertise using the goodwill method. Immediately after formation, Lola’s capital account would reflect a balance of:

Question 21 options:

a) 

$20,000 credit

b) 

$60,000 credit

c) 

$20,000 debit

d) 

$45,000 credit

Question 22 (4 points)

Saved

Lydia, James, and Lola’s partnership calls for the following allocation of income: James and Lola are to receive lump sum salary payments of $50,000 each, Lydia and Lola are to receive interest of 5% of their ending capital balances, if there’s a profit James is to receive a bonus equal to 10% of the profit, and any remaining income is to be split between Lydia, James, and Lola 40%, 20%, and 40% respectively. Lydia, James, and Lola’s ending capital balances were $100,000, $50,000, and $150,000 respectively. If there was a partnership net profit of $500,000, how much was allocated to Lola in total?

Question 22 options:

a) 

$192,500

b) 

$57,500

c) 

$167,500

d) 

$150,000

Question 23 (4 points)

Saved

Lydia, James, and Lola’s partnership calls for the following allocation of income: James and Lola are to receive lump sum salary payments of $20,000 each, Lydia and Lola are to receive interest of 5% of their ending capital balances, if there’s a profit James is to receive a bonus equal to 10% of the profit, and any remaining income is to be split between Lydia, James, and Lola 40%, 20%, and 40% respectively. Lydia, James, and Lola’s ending capital balances were $100,000, $50,000, and $150,000 respectively. If there was a partnership net loss of <$100,000>, how much was allocated to or <from> James in total?

Question 23 options:

a) 

<$56,000>

b) 

$20,000

c) 

<$33,500>

d) 

<$10,500>

Question 24 (4 points)

Saved

Lydia, James, and Lola are in a partnership together and each have capital balances of $250,000. A new partner, Shawn, pays James $200,000 directly for 100% of his interest in the new partnership, replacing him in the partnership. The journal entry on the books of the partnership to account for this transaction would be:

Question 24 options:

a) 

Debit Capital-James $200,000, Debit Cash $50,000; Credit Capital-Shawn $250,000

b) 

Debit Capital-James $250,000; Credit Capital-Shawn $250,000

c) 

Debit Cash $250,000; Credit Capital-Shawn $250,000

d) 

No entry is made on the partnership’s books as the transaction was made directly between James and Shawn

Question 25 (4 points)

Saved

Lydia, James, Lola, and Shawn are in a partnership together and have a combined capital balance of $700,000. A new partner, Carol pays the partnership $300,000 directly for a 1/5 interest in the new partnership. The partnership chooses the goodwill method to existing partners to account for this transaction and will allocate any increase in implied value evenly amongst the existing partners. The journal entry on the books of the partnership to account for this transaction would be:

Question 25 options:

a) 

Debit Goodwill $400,000, Debit Cash $800,000; Credit each of the existing partner’s capital accounts $200,000 each, Credit Capital-Carol $400,000

b) 

Debit Goodwill $300,000, Debit Cash $800,000; Credit each of the existing partner’s capital accounts $200,000 each, Credit Capital-Carol $300,000

c) 

A Debit Cash $300,000, Debit Goodwill $400,000; Credit each of the existing partner’s capital accounts $100,000 each, Credit Capital-Carol $300,000

d) 

Debit Cash $300,000, Debit Goodwill $500,000; Credit each of the existing partner’s capital accounts $125,000 each, Credit Capital-Carol $300,000

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